Illinois' budgetary train wreck and think-tank's taxing solution

Times have been hard around the country the past two years, but Ralph Martire, executive director of the Center for Tax and Budget Accountability, thinks Illinois' budgetary woes resemble a train wreck.

In its new report, released today, Martire's Chicago-based budget think-tank said the state's low levels of taxation, a multi-year practice of using the state's pension to pay operating expenses and the economic meltdown have combined to create a deficit that, at nearly $9.5 billion, is close to 40 percent of the state's entire budget.

The report said the mess has come about not because of spending "like a drunken sailor" or because of misplaced priorities--the four areas of education, health care, human services and public safety account for more than 90 percent of General Fund expenditures--but because the pie is too small.

The fix: raise the state income tax from 3 to 5 percent, increase the corporate income tax rate from 4.8 percent to 8 percent and make retirement income for tax filers with more than $50,000 in Adjusted Gross Income subject to the state's personal income tax.

Martire acknowledged that this would be a tough sell for the state's politicians. But he said Rep. Mike Lawrence told him how he could ensure passage: